Retail sales in U.S. rose less than forecast in December

SALES at U.S. retailers in December rose less than forecast, restrained by cheaper fuel prices and holiday discounting that helped hold down the value of goods sold.

BLOOMBERG NEWS FILE PHOTO SIMON DAWSON

Posted:
Thursday, January 12, 2012 9:42 am

By Bob WillisBloomberg News

WASHINGTON - Sales at U.S. retailers in December rose less than forecast, restrained by cheaper fuel prices and holiday discounting that helped hold down the value of goods sold.

The 0.1 percent gain followed a 0.4 percent advance in November that was more than initially reported, Commerce Department figures showed Thursday. Economists forecast a 0.3 percent December rise, according to the median estimate in a Bloomberg News survey. Purchases excluding automobiles fell 0.2 percent, the first decline since May 2010.

Retailers like Macy’s Inc. resorted to discounting early in the holiday shopping season to ensure consumers shopped for gifts amid slower wage gains and lower property values. The figures show spending eased at the end of the fourth quarter, and may raise the odds purchases will cool early this year.

“Consumers pulled out all the stops to have a decent holiday season, but we’re seeing the momentum from that dropping off,” said Tim Quinlan, an economist at Wells Fargo Securities LLC in Charlotte, N.C., which correctly forecast the December sales gain. “We suspect the rate of consumer spending will slow.”

Retail sales were projected to accelerate after rising a previously reported 0.2 percent in November, according to the Bloomberg survey. The 75 economists’ estimates ranged from a decline of 0.2 percent to a gain of 0.9 percent.

For all of 2011, retailers enjoyed their strongest sales year since 1999. Purchases climbed 7.7 percent after a 6.5 percent gain in 2010.

Jobless Claims

More Americans than forecast filed applications for jobless benefits, a Labor Department report showed. Claims increased by 24,000 to 399,000 last week. The median forecast in a Bloomberg survey of economists called for 375,000 filings.

Stock-index futures trimmed gains after the reports. The contract on the Standard & Poor’s 500 Index expiring in March rose 0.2 percent to 1,290.7 at 9:02 a.m. in New York after climbing as much as 0.7 percent.

Seven of 13 major categories showed gains last month, led by a 1.5 percent jump at car dealerships. Purchases rose 1.6 percent at building materials outlets, where favorable weather across the U.S. may have helped bolster sales. The average temperature in the contiguous 48 states was 35 degrees Fahrenheit (1.7 degrees Celsius), the 34th warmest December in 117 years, according to the National Climatic Data Center’s website.

Auto Sales

Car and light truck sales in the U.S. advanced in December at a 13.5 million seasonally adjusted annualized rate following a 13.6 million pace in November, according to researcher Autodata Corp.

Ford Motor Co., the second-largest U.S. carmaker, posted a 10 percent gain in sales last month from a year earlier, and closed out 2011 with 2.15 million light vehicles purchased, an 11 percent gain.

“We were able to end the year on, what we feel, is a high note,” Erich Merkle, Ford’s U.S. sales analyst, said on a conference call Jan. 4. “December was a strong number.”

Sales gains were also noted at furniture outlets, health stores and apparel retailers. Purchases declined at electronics and department stores, as well as non-store retailers that include Internet merchants.

Electronics Purchases

The 3.9 percent slump at electronics and appliance stores, the biggest since March 2009, followed a 0.5 percent gain in November and 2.4 percent jump a month earlier.

Gas-station sales fell 1.6 percent last month. The retail data, which aren’t adjusted for inflation, reflected a drop in gasoline receipts at service stations. Regular fuel at the pump averaged $3.26 a gallon in December, down from $3.38 a month earlier, according to AAA, the nation’s biggest auto group.

Sales excluding autos, gasoline and building materials, which renders the figures used to calculate gross domestic product, fell 0.2 percent after a 0.3 percent increase the prior month and a 0.5 percent gain in October.

Retailers benefited from a weekend Christmas holiday even as they resorted to discounting. With Christmas Eve falling on Saturday, Macy’s, the second-largest U.S. department store chain, opened some locations for 83 straight hours and extended closing hours to 2 a.m. at others.

Amazon.com Inc. was among online merchants that did well early during the holidays. The No. 1 Internet retailer on Dec. 15 said customers had bought about 1 million of its Kindle e-book readers and tablets in each of the prior three weeks.

The figures follow a report earlier this month that showed improvement in the labor market may help sustain spending. Employers added 200,000 jobs in December, twice as many as the prior month, and the unemployment rate dropped to 8.5 percent, Labor Department data showed Jan. 6. Hours worked and earnings also picked up.

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